Question

# QUESTION 1: Use the following information about the population of Guyana in December 2017 to answer...

QUESTION 1:

Use the following information about the population of Guyana in December 2017 to answer the below question:

Children - 227,000
Employed - 262,000
Unemployed - 36,000

What was the unemployment rate in December 2017?

(Put your answer in PERCENT form WITHOUT the percent sign.  Round to 1 decimal place.)

QUESTION 2:

Like most countries, Guyana is suffering recessionary pressure currently as a result of the crisis. In an attempt to avoid further increasing the deficit, it has reduced government spending. This policy is a movement toward a balanced budget (though Guyana will still run a deficit). This policy will _____ the debt and _____ recessionary pressures.
a) increase; reduce
b) increase; intensify
c) decrease; reduce

d) decrease; intensify

1> The unemployment rate is the ratio of unemployed and labor force. Labor force is the sum of employed and unemployed people.

So, it will be unemployed/(employed+unemployed) = 36000/(262000+36000) = 12.08%

2> It is an example of contractionary policy when government reduce their spending. So, it will decrease the debt and intensify recessionary pressure. Since the economy is already in recession, a further decrease in investment will take it to a further lower level of output. Thus, recessionary pressure will intensify.

The correct option is d.

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